Provisions of contract must be read as a whole - G.R. No. 180168

Article 1306 of the Civil Code provides that “[t]he contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.”

Moreover, Article 1374 of the Civil Code clearly provides that “[t]he various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.” Indeed, in construing a contract, the provisions thereof should not be read in isolation, but in relation to each other and in their entirety so as to render them effective, having in mind the intention of the parties and the purpose to be achieved.7 In other words, the stipulations in a contract and other contract documents should be interpreted together with the end in view of giving effect to all.8

In the present case, the Court finds nothing repugnant to law with respect to the questioned provisions of the contract of lease between petitioner and respondent. It is true that Article II, Paragraph 2.04 of the Contract of Lease states that “[a]ny subsequent amendment to Administrative Order No. 4, Series of 1982, which will effect a decrease or escalation of the monthly rental or impose new and additional fees and charges, including but not limited to government/MIAA circulars, rules and regulation to this effect, shall be deemed incorporated herein and shall automatically amend this Contract insofar as the monthly rental is concerned.”9 However, the Court agrees with the CA that the abovequoted provision of the lease contract should not be read in isolation. Rather, it should be read together with the provisions of Article VIII, Paragraph 8.13, which provide that “[a]ny amendment, alteration or modification of th[e] Contract shall not be valid and binding, unless and until made in writing and signed by the parties thereto.”10 It is clear from the foregoing that the intention of the parties is to subject such amendment to the conformity of both petitioner and respondent. In the instant case, there is no showing that respondent gave his acquiescence to the said amendment or modification of the contract.

The situation is different with respect to the payments of the increased rental fee made by respondent beginning October 1994 because by then the amendment to the contract was made in writing through a bill sent by petitioner to respondent.11 The fact that respondent subsequently settled the said bill proves that he acceded to the increase in rental fee. The same may not be said with respect to the questioned rental fees sought to be recovered by petitioner between September 1991 and September 1994 because no bill was made and forwarded to respondent on the basis of which it could have given or withheld its conformity thereto.

It may not be amiss to point out that during the abovementioned period, respondent continued to pay and petitioner kept on receiving the original rental fee of P6,580.00 without any reservations or protests from the latter.12 Neither did petitioner indicate in the official receipts it issued that the payments made by respondent constitute only partial fulfillment of the latter's obligations. Article 1235 of the Civil Code clearly states that “[w]hen the obligee accepts the performance knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with.” For failing to make any protest or objection, petitioner is alreadyestopped from seeking recovery of the amount claimed.

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